I am about to sign Purchase and Sale - Lead found - Strategy?

Question

Greetings BP,

You all are the best.  I read something on here about a site in Massachusetts where you can check if a house has been flagged for lead: Massachusetts Lead Safe Homes Link Here

After visiting the site I learned the house I am about to purchase was flagged. The landlord already submitted the lead-disclosure form to me stating he does not know if lead is present.

I am wondering about proceeding and a potential strategy.

The house is a three family.  First floor has peeling paint and needs new windows. There is an infant and another kid under six.

Second unit, was the unit that was flagged. It has been freshly painted and there are two kids under six living there.

I believe the third floor has all new windows and should be lead free as it was renovated. New tenant moving in next month, not sure if she has kids.

I like the seller, but there is a strong possibility he was keeping the "lead-flagging" from me.

One potential strategy was signing the purchase and sale with a contingency based off of the inspection. Then we would mention the lead hazard and then request he get lead-certs for all three units.

I did beat several people to have my bid accepted.  I'm likely the only buyer that would care about this or do the research. It's a great deal if I can find a way to resolve the lead issue.

Does anyone have any strategies and suggestions.

Thank you again,

Neil

Robert Loiselle · Answer

@Neil Greene  I'm working on becoming a licensed lead paint inspector in MA.  Currently hold a provisional license and am in the final stages of license approval.

First, and this is no disrespect to folks from out of state, but DO NOT listen to someone from out of state (unless they own/invest here) when it comes to the lead paint laws in MA.  We have some of the strictest laws in the country and are very nuanced.  The advice I see from out of state can get people in MA in serious trouble.

You've got an interesting situation.  It's tough to say if the owner is knowingly leaving out the status of the lead paint.  When was the 2nd unit tested according to the database?  You can cross reference that with the date the current owner bought the place.  Honestly, if he's knowingly in violation...that's pretty sketchy and illegal.

Is he using a real estate agent to sell it?  @Charlie MacPherson...as an aside, how much are realtors trained in looking at the MA Lead Paint Database?  My experience is really that they're mostly trained in filling out the form correctly so the brokers don't get fined.  Just curious.

So...in MA, when you take ownership of a property, you have 90 days to bring it into compliance without being strictly liable under the lead paint laws.  During that time though, you'll have to get the property inspected (by a licensed inspector), deleaded (likely all 3 units and the exterior), and then reinspected.  While the work is being done, the tenants (likely) have to be out of the units and if it's multiple nights and they don't have someone they can stay with, it's on the landlord to pay for a hotel.

As you can see, this has the potential to be pretty expensive for you.  I would bring this up with the seller, have an honest and frank discussion, and try to negotiate either, 1) the seller does all the work prior to close or, 2) a lower price so you can do all this work by the books.

If he gives you a lot of push back, honestly it's probably not worth it to you...especially if he's knowingly withholding that information.

Happy to answer other questions you might have Neil

Jonathan R McLaughlin · Answer

@Charlie MacPherson and @Robert Loiselle and @chris Franklin are giving good advice. The lead paint database is rarely accessed or even known of by realtors--they have no incentive to be informed. We walked away from one property where the unit had been flagged and I really don't think anyone involved in the transaction knew about it. Certainly no broker I have ever worked with in MA has suggested looking it up.

Practically, most everyone in MA gets by on a kind of don't ask don't tell policy of signing the disclosure that no one knows if there is lead, when everyone knows there is probably lead in there somewhere. Lots of problems and perverse incentives to that approach-such as landlords not wanting to rent to people with kids even though thats against the law--but its pretty commonly done. Ultimately people are risking a lot by doing so with MA "strict liability" laws in place.

But you don't have even this option.

It was flagged very recently and properties generally don't wind up in that database unless there was a complaint and the condition is pretty egregious. You have to fix it, and not just practically but by crossing all the expensive "Ts" and dotting all the super expensive "I's"

You would be in a lot of trouble. I'm simplifying, but did you know the baby could ingest lead from dirt in some completely random place and you would still be liable because they don't have to prove it came from your house if you are not compliant--and in this case they have documentation that proves its in your house. Oy.

And don't feel bad for the seller he is ignoring that THERE ARE TWO KIDS IN THERE THAT COULD BE POISONED. Its an actual health problem from what you describe, not just a theoretical burden. His behavior is outrageous. @Chris Franklin did the right thing to protect the kids even despite the parents bad behavior. Your seller is failing his obligation to those kids, don't join him.

Charlie MacPherson · Answer

@Neil Greene the seller is in violation of The lead paint law.  I would NOT sign that P&S until this is resolved.

There is a potential for massive liability - right now, it’s all on him.

If you elect to move forward, I’d put lead remediation in the contract and hold very firmly to that point.  Be sure remediation is complete prior to closing, or you’ll be putting those tenants up in a hotel while it’s being done.

Robert Loiselle · Answer

@Neil Greene...OK, well we know he's 100% withholding the info about the failed test.  I wouldn't feel too bad for the owner.  He clearly doesn't feel bad about handing the liability of this property to you or someone else.  He's blatantly renting to kids under 6 in a unit that's failed a lead inspection.  The tenants could really go after him from a legal standpoint if they knew to.

Have a discussion with him and see how it goes.  He's clearly in violation of the law.

In terms of cost, initial inspections for a 3-fam would likely be around 1k or so.  Probably about the same for the reinspections after the deleading is done.  It's tough to ballpark the cost of deleading.  The amount of work is unknown and you can get quotes that have quite a range to them.  I will say this, the laws were changed in December of 2017.  They actually reduced the number of surfaces that needed to be deleaded and lowers the cost for owners.

If the owner (or you) got the work done, he gets $1500 tax credit from MA for each unit deleaded.  So it covers the cost of the inspection and a bit of the work.  Not a huge help, but it helps.

Robert Loiselle · Answer

@Charlie MacPherson  I appreciate the info.  Makes sense to just rely on the owner for information like that and keep the liability in their court.  It doesn't seem like many folks even know about the database maintained by the state.

Charlie MacPherson · Answer

@Robert Loiselle We are trained NOT to go outside our areas of expertise.  That's hammered in pretty hard in classes and continuing ed.

We do get training in lead paint, but representing anything beyond what a seller tells us gets us into dangerous territory liability-wise.

I always tell buyers of pre-1978 homes about lead paint and what the implications are.  I give them the lead paint brochure and if they have more questions, I advise them to talk with an inspector.

Neil Greene · Answer

Thank you @Robert Loiselle for the thorough response.

He purchased the home in 2008.  The test was in 1/2018.

If I had to do the repairs the property would not be worth it.

I like the idea of an honest and frank discussion.  I certainly do not want to pay for the remediation.  But I know the current owner has put in about $80k, and I honestly feel a bit bad for him.

I'd be willing to help pay for some of the repairs, but the building would need to be "delivered to me" with lead certs.

Chris Franklin · Answer

Neil I would have the kids in the to apartments were you think there is lead paint tested for lead poisoning, because if they have lead poisoning you want to make sure it is on the present landlords dime not yours. If the kids have lead poisoning I would call my attorney and have him help me with what would need to be done next. Neil 5 years ago I had newborn twins in a house that had lead paint,, the parents were druggies and the state came in and told me I had to put them up in a hotel until the house was lead free. I got my deleading cert. for the state of mass paid for a hotel and food for the lossers for a month until I finished the job and it was lead free. The total cost was about $18,000 out of pocket as compaired to deleading companies that wanted any were from 35,000 - 50,000 for the same job and this was done in Mass. Neil I would tread lightly knowing what I know now about how Mass treats landlords and lead paint. If the kids have lead poisoning and you buy the place you could be on the hook for thousands in expenses of those kids a they get older this is nothing to mess with out help.

Neil Greene · Answer

Thank you Charlie and Heath for your prompt response.  I will check with my attorney on Monday and likely not sign the PnS.

Heath Ryans · Answer

@Neil Greene basically everything built prior to 1978 has lead based paint. It's fine as long as you keep it painted. If the lead paint starts to chip and fall off everywhere, then you have to have it removed and I'm pretty sure that will cost a bit of money because it has to be professionally done. If it's not flaking off, it's most likely like half the houses in the country and it's fine.

I'm not sure about the whole flagging process though. I"ve never heard of that.

I am about to sign Purchase and Sale - Lead found - Strategy?

Most Popular Reply